The government may consider compensating small investors affected by the merger of five struggling Islamic banks, according to Arif Hossain Khan, Executive Director and Spokesperson of the Bangladesh Bank.

“If small, affected investors approach the government with an application, there is an expectation that the government may address their situation according to its capacity,” he told reporters at the central bank’s headquarters in Dhaka on Monday.

Khan said decision-makers could take a “humanitarian approach” in considering compensation, even if it meant moving beyond conventional accounting practices. He acknowledged growing concerns among retail investors who hold shares in the banks slated for merger.

The spokesperson outlined the ongoing multi-stage regulatory process, explaining that the plan to consolidate the five troubled institutions into a single Islamic bank began with a government letter of interest submitted to Bangladesh Bank earlier this year. The central bank has since granted its consent to the proposal.

He stated that the formal establishment of the new entity would require approval from the Registrar of Joint Stock Companies and Firms (RJSC), which would detail the bank’s board formation and shareholding structure.

Once registered, the entity must seek authorization from Bangladesh Bank under the Bank Company Act to operate as a licensed bank.

“Only after the central bank’s final approval can the new bank begin formal operations from its principal office,” Khan said, adding that all steps would strictly follow existing legal procedures.